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Super Conforming Mortgages
Effective for mortgages with Freddie Mac settlement dates on and after January 2, 2009
Updated December 18, 2008. The information below supercedes previous versions.
Freddie Mac's "super conforming" mortgages are mortgages using the higher conforming loan limits permitted by the Housing and Economic Recovery Act of 2008 (Act).
To make credit more broadly available and help lower financing costs, the Act increases Freddie Mac's conforming loan limits in certain high-cost areas to the lesser of 115 percent of the area median home price or 150 percent of the conforming loan limit, currently $625,500 for 1-unit properties.
This Web page contains detailed information on our pricing and credit requirements for super conforming mortgages. Super conforming mortgages with note dates on and after October 1, 2008, are eligible for Freddie Mac settlements on and after January 2, 2009.
Loan Limits*
From January 2, 2009 through and including December 31, 2009, Freddie Mac will purchase super conforming mortgages up to the following loan limits:
| Number of Units |
2009 Maximum Original Loan Amount for High-Cost Area Properties NOT in Alaska, Guam, Hawaii or Virgin Islands* |
2009 Maximum Original Loan Amount for High-Cost Area Properties in Alaska, Guam, Hawaii or Virgin Islands* |
| 1 |
115% of the "area median house price," not to exceed $625,500 |
115% of the "area median house price," not to exceed $938,250 |
| 2 |
115% of the "area median house price," not to exceed $800,775 |
115% of the "area median house price," not to exceed $1,201,150 |
| 3 |
115% of the "area median house price," not to exceed $967,950 |
115% of the "area median house price," not to exceed $1,451,925 |
| 4 |
115% of the "area median house price," not to exceed $1,202,925 |
115% of the "area median house price," not to exceed $1,804,350 |
*These are the maximum potential loan limits for designated high-cost areas. Actual loan limits for specific high-cost areas may be lower. For 2009, only the loan limits for three counties, all in Hawaii, exceed the base loan limits for the four high-cost States and territories.
Visit the Federal Housing Finance Agency site for details on the 2009 High-Cost Area Loan Limits [PDF] and 2009 Loan Limits for All Counties
[XLS].
Eligible Products, Purpose and Occupancy Requirements |
| Products |
- 15-, 20-, and 30-year fixed-rate mortgages, fully amortizing
- Initial Interest® fixed-rate mortgages with a 10-year interest-only payment period or greater
- 5/1, 7/1 and 10/1 adjustable-rate mortgages (ARMs), fully amortizing
- Initial Interest 5/1, 7/1 and 10/1 ARMs with a 10-year interest-only payment period or greater
|
| Purpose |
- Purchase transactions
- No cash-out refinances
- Cash-out refinances
|
| Property Type |
- 1- to 4-unit primary residences
- Second homes
- 1- to 4-unit investment properties
|
Eligibility and Underwriting Requirements |
| Loan Characteristic |
Requirements |
| LTV/TLTV/HTLTV Ratio Requirements |
- See Maximum LTV, TLTV, and HTLTV Ratio Requirements section below
|
| Loan Prospector Assessment |
- Loan Prospector® Accept or A-minus assessment required for loan amounts up to $1 million.
- Super conforming mortgages are not eligible for Loan Prospector Accept Plus documentation.
- Initial Interest Mortgages must receive an Accept credit risk class and comply with Guide Chapter J33.
- Manual underwriting is required for Loan Prospector Caution mortgages and mortgages with loan amounts greater than $1 million. In addition to the requirements in Guide Chapter 37, manually underwritten mortgages must meet the minimum Indicator Score requirements as outlined in the section below, Minimum Indicator Score for Manually Underwritten Super Conforming Mortgages.
|
| Additional Underwriting Requirements |
- The borrower's credit reputation is acceptable if:
- The mortgage receives a Risk Class of Accept
- The Mortgage receives a Risk Class of Caution-eligible for A-minus and if all requirements in Chapter C33 for A-minus Mortgages are met.
- Noncredit payment references prohibited
- If the mortgage receives a Loan Prospector risk evaluation status of invalid, ineligible or incomplete, the Seller must take all steps possible in accordance with Guide Section 2.2.1 to correct the information and resubmit the mortgage.
- Super conforming mortgages with original loan amounts of $1 million or less that have never been submitted to Loan Prospector are not eligible for delivery.
- For manually underwritten super conforming mortgages, the maximum debt-to-income ratio is 45 percent.
|
| Appraisals and collateral documentation requirements |
- The Seller must obtain an appraisal report with an interior and exterior inspection that meets the requirements of Guide Section 44.
- For LTV/TLTV/HTLTV ratios >75% and where the value of the mortgaged premises is $1 million or greater, a Form 1032, One-Unit Residential Appraisal Field Review Report or Form 1072, Two- to Four-Unit Residential Appraisal Field Review Report, is required.
- When the Field Review Report results in a different value, the lower of the original appraised value, field review value or sales price must be used to calculate the LTV/TLTV/HTLTV ratio and the lower of the appraised value or field review value must be delivered in the appraised value field on the Form 11, Mortgage Submission Schedule, or Form 13SF, Mortgage Submission Voucher.
- The person performing the appraisal must be qualified to perform appraisals without oversight or supervision by a "supervisory" or "review" appraiser and must be experienced with the types of properties that are eligible for super conforming financing.
- When the property is a Condominium Unit Mortgage in a new project, a newly converted project, or an area where the property seller owns a substantial number of units, at least two comparable sales must be outside the influence of the developer, builder or property seller. Resales from within the subject project may be used to meet this requirement. When comparable sales from outside the subject project are used, they must also be outside the influence of the subject property's developer, builder or property seller.
- Super conforming mortgages secured by Condominium Unit Mortgages are not eligible for Streamlined Reviews outlined in Guide Section 42.4.
|
| Mortgage Insurance (MI) |
- Standard mortgage insurance is required.
- Lender-paid mortgage insurance with single premiums is permitted.
|
| Maximum Cash-out Amount |
- For 1-unit cash-out refinance mortgages, the disbursed cash out to the borrower (or any other payee) may not exceed $200,000.
- For all 2- to 4-unit cash-out refinance mortgages, the disbursed cash out to the borrower (or any other payee) may not exceed $100,000.
|
| Ineligible Products and Features |
- Balloon/Reset Mortgages
- Initial Interest Mortgages with Interest Only Periods less than 10 years
- ARMs with initial periods of less than 5 years
- Convertible ARMs
- Renovation Mortgages
- Alt 97® Mortgages
- Mortgages secured by manufactured homes
- Home Possible® Mortgages
- Seller-Owned Converted Mortgages
- Seller-Owned Modified Mortgages
- FHA/VA Mortgages
- Rural Housing Service Section 502 GRH Mortgages
- Section 184 Native American Mortgages
- Newly Built Home Mortgages
- Construction Conversion Mortgages
- Affordable Merit Rate® Mortgages
- Mortgages using the Home Value Models
- Mortgages with documentation greater than 120 days before the Note Date
- Participation Mortgages
- Mortgages sold through MIDANET®
- 40-year fixed rate Mortgages
- Mortgages with flexible mortgage insurance options
- Mortgages with financed mortgage insurance premiums
- Mortgages with annual or monthly lender-paid mortgage insurance premiums
- Loan Prospector® mortgages with an original loan amount greater than $1 million
|
Delivery Requirements |
| Eligible Executions |
- Guarantor, Cash and MultiLender sale paths through the selling system only.
- Bulk securities transaction capabilities.
- Fixed-rate mortgages are TBA eligible as long as super conforming mortgages do not exceed 10 percent of the unpaid principal balance of all mortgages in the applicable pool and other applicable de minimis requirements are met.
|
| Delivery Requirements |
- Delivery requirements will be finalized and announced in an upcoming Guide Bulletin.
|
| Delivery Fees |
- Super conforming mortgages will have the standard guarantee-fee plus applicable current Single-Family Seller/Servicer Guide Exhibit 19 delivery fees plus unique super conforming mortgage postsettlement delivery fees.
|
Servicing Requirements |
| Servicing |
- There are no unique servicing requirements related to the servicing of super conforming mortgages. All Guide servicing requirements apply including Section 51.11 (c) requirements.
|
Note:
- For additional details on requirements for super conforming mortgages refer to Single-Family Seller/Servicer Guide (Guide) Chapter L33
- Where these requirements are silent, the minimum requirements in our Single-Family Seller/Servicer Guide (Guide) apply.
- If there is a conflict between any of the requirements for super conforming mortgages and any other Guide-permitted product or offering, the more restrictive requirement(s) apply.
- Unless specifically made applicable to super conforming mortgages, negotiated terms in a Sellers' purchase documents will not apply to super conforming mortgages, and special negotiated mortgage products described in the purchase documents may not be used with super-conforming mortgages.
|
Maximum LTV, TLTV, and HTLTV Ratio Requirements*
Maximum LTV/TLTV/ HTLTV Ratios
PURCHASE AND "NO CASH-OUT" REFINANCE MORTGAGES
(15-, 20- or 30-year Fixed-Rate and 5/1, 7/1, 10/1, Amortizing ARMs) |
| Property Type |
Max. LTV
w/o Sec. Fin. |
Max. LTV
w Sec. Fin. |
Max. TLTV
w/Sec. Fin. |
Max. HTLTV
w/Sec. Fin. |
| 1-unit Primary Residence |
90% |
85% |
90% |
90% |
| 2- to 4-unit Primary Residence |
75% |
70% |
75% |
75% |
| Second home |
85% |
80% |
85% |
85% |
| 1-unit Investment Property Purchase |
85% |
80% |
85% |
85% |
| 1-unit Investment Property "No Cash-out" Refinance |
75% |
70% |
75% |
75% |
| 2- to 4-unit Investment Property |
70% |
65% |
70% |
70% |
CASH-OUT REFINANCE MORTGAGES
(15-, 20- or 30-year Fixed-Rate and 5/1, 7/1, 10/1, Amortizing ARMs) |
| Property Type |
Max. LTV
w/o Sec. Fin. |
Max. LTV
w Sec. Fin. |
Max. TLTV
w/Sec. Fin. |
Max. HTLTV
w/Sec. Fin. |
| 1-unit Primary Residence |
80% |
75% |
80% |
80% |
| 2- to 4-unit Primary Residence |
70% |
65% |
70% |
70% |
| Second Home and 1-unit Investment Property |
75% |
70% |
75% |
75% |
| 2- to 4-unit Investment Property |
65% |
60% |
65% |
65% |
STREAMLINED REFINANCE MORTGAGES
(Freddie Mac-owned and Mortgages not currently owned or securitized by Freddie Mac) |
| Property Type |
Max. LTV
w/o Sec. Fin. |
Max. LTV
w/Sec. Fin. |
Max. TLTV
w/Sec. Fin. |
Max. HTLTV
w/Sec. Fin. |
| 1-unit Primary Residence |
90% |
85% |
90% |
90% |
| 2 –unit Primary Residence |
75% |
70% |
75% |
75% |
| Second home |
85% |
80% |
85% |
85% |
PURCHASE AND "NO CASH-OUT" REFINANCE MORTGAGES
Loan Prospector® Initial InterestSM Mortgages
(Fixed-rate, (5 /1, 7/1 and 10/1 ARMs with an Interest Only Period of 10 years, or greater) |
| Property Type |
Max. LTV
w/o Sec. Fin. |
Max. LTV
w/Sec. Fin. |
Max. TLTV
w/Sec. Fin. |
Max. HTLTV
w/Sec. Fin. |
| 1-unit Primary Residence |
90% |
85% |
90% |
90% |
| Second home |
85% |
80% |
85% |
85% |
"CASH-OUT" REFINANCE MORTGAGES
Loan Prospector® Initial InterestSM Mortgages
(Fixed-rate with an Interest Only Period of 10 years, or greater) |
| Property Type |
Max. LTV
w/o Sec. Fin. |
Max. LTV
w Sec. Fin. |
Max. TLTV
w/Sec. Fin. |
Max. HTLTV
w/Sec. Fin. |
| 1-unit Primary Residence |
80% |
75% |
80% |
80% |
| Second home |
75% |
70% |
75% |
75% |
"CASH-OUT" REFINANCE MORTGAGES
Loan Prospector® Initial InterestSM Mortgages
(5 /1, 7/1 and 10/1 ARMs, with an Interest Only Period of 10 years) |
| Property Type |
Max. LTV
w/o Sec. Fin. |
Max. LTV
w Sec. Fin. |
Max. TLTV
w/Sec. Fin. |
Max. HTLTV
w/Sec. Fin. |
| 1-unit Primary Residence |
75% |
70% |
75% |
75% |
| Second home |
65% |
60% |
65% |
65% |
*For designated high-cost areas where the maximum loan limit exceeds $625,500 for a one-unit property mortgage, the maximum LTV/TLTV/HTLTV ratio is 80 percent. Additional details will be communicated in an upcoming Single-Family Seller/Servicer Guide Bulletin.
Minimum Indicator Scores for Manually Underwritten "Super Conforming" Mortgages
Super conforming mortgages with loan amounts greater than $1 million and mortgages that receive a Loan Prospector Credit Risk Class of Caution must be manually underwritten and meet the minimum Indicator Score requirements as outlined below.
Note: Initial Interest Mortgages may not be manually underwritten per Chapter J33 of the Guide.
MANUALLY UNDERWRITTEN PURCHASE AND "NO CASH-OUT" REFINANCE MORTGAGES |
| Property Type |
Maximum TLTV |
Minimum Indicator Score |
| 1- to 4-unit Primary Residence |
> 75% |
660 |
| < 75% |
620 |
| Second Home |
> 75% |
720 |
| < 75% |
620 |
| 1-unit Investment Property |
> 75% |
720 |
| < 75% |
620 |
| 2- to 4-unit Investment Property |
> 75% |
NA |
| < 75% |
660 |
MANUALLY UNDERWRITTEN "CASH-OUT" REFINANCE MORTGAGES |
| Property Type |
Maximum TLTV |
Minimum Indicator Score |
| 1-unit Primary Residence |
> 70% |
720 |
| < 70% |
620 |
| 2- to 4-unit Primary Residence |
> 70% |
NA |
| < 70% |
680 |
| Second homes and Investment Property |
> 70% |
720 |
| < 70% |
700 |
Pricing
Pricing for super conforming mortgages will be as follows:
- Your applicable guarantee fee for the mortgage product type
- Plus Single-Family Seller/Servicer Guide Exhibit 19 [PDF 340K] delivery fees current at the time of settlement, including unique super conforming postsettlement delivery fees.
Learn more about Freddie Mac Super Conforming Mortgages:
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